COMMERCIAL LEASING BILL OPPOSED

Our industry is opposing AB 2538 which seeks to ban a common business-to-business contractual agreement in leasing of commercial retail space at certain types of shopping malls. Except in specific instances relating to seismic issues and consumer disclosures, the state has not sought to insert itself into such leasing agreements to the benefit of one business over another.

Most commercial real estate leases will have dozens to hundreds of “deal points” that tenants and property owners/managers are free to agree to or not. This bill tries to isolate one specific type of agreement referred to as a “radius restriction” and would ban it. In general, we think willing businesses should be able to negotiate business contracts that work for them. And specifically, we ask that this bill be rejected because the sponsors have let it be known they are pursuing this bill because they believe it will help a project they are currently trying to develop at the expense of another business across town.

The bill is set for April 19 and we are doing everything possible to make the case that this bill should be dropped or significantly changed in a manner that doesn’t get into the middle of leases for good reason.